PayMe users in Hong Kong can now hold a Hong Kong dollar stablecoin from HSBC and send it to friends or spend it at shops that take PayMe. HSBC RedCoin, ticker RCHKD, is what the bank calls its first stablecoin. A stablecoin is a digital token built to stay near the value of a government currency. This one tracks the Hong Kong dollar. It became available on PayMe on 23 October 2026, according to HSBC’s announcement.

The issuer is The Hongkong and Shanghai Banking Corporation Limited, owned outright by HSBC Holdings plc. The Hong Kong Monetary Authority (HKMA) lists the company on its register under the Stablecoins Ordinance (Cap. 656) as licence FRS02, effective 10 April 2026. Anchorpoint Financial Limited is the other licensee, FRS01, from the same day. HSBC says RedCoin meets the financial-crime controls the ordinance requires.

The coin is live on PayMe now. Over the next few days, HSBC says, more than 3.3 million people on the app will be able to open a wallet.

Paying friends and PayMe shops

You can send RedCoin to friends and family who have a wallet on PayMe. If a shop takes PayMe, you pay from the coin balance without checking whether it takes RedCoin. The announcement puts the merchant network above 100,000.

HSBC’s own online survey in June 2026, of 1,060 customers aged 18 to 64, found that 53 per cent believed a Hong Kong dollar stablecoin could make the city’s economy more competitive.

Cashing out at one Hong Kong dollar per coin

A holder can redeem at par. Par means the coin comes back as one Hong Kong dollar. The holder terms treat a request on an allowed channel as a sale back to HSBC, the issuer. It counts only when it meets conditions the bank sets.

HSBC takes the coins from the wallet and credits Hong Kong dollars to the wallet or account on that same channel, after any fee that applies. The terms don’t state a fee amount, though fees may apply. The steps and the schedule sit in a separate note on the bank’s site.

The terms say a valid request is taken at once and inside one business day. HSBC can still delay or refuse a redemption, including where it suspects fraud. You may not be able to cancel after you send it.

What the reserve holds

HSBC must keep a reserve in trust, of money and other assets the ordinance allows, worth at least the par value of coins in issue. The trustee is HSBC Institutional Trust Services (Asia) Limited. The pool sits in an account in the trustee’s name. HSBC is custodian. Holders are beneficial owners, each for the value of coins they hold. The issuer manages the pool, keeps the income, bears the losses and can take surplus out.

The product page updates the figures daily. On 27 October 2026 the par value of coins in circulation was HKD 81,425,493.24. Reserve assets had a market value of HKD 82,425,493.24, and the cash line on the page is that same number. The seven-day change in par value was HKD +80,157,394.18.

HSBC says it will post the coin count, the reserve and regular reports from a qualified independent auditor covering value and composition. The first report is expected after the fourth quarter of 2026. None is up.

If HSBC fails as custodian of the reserve, the trustee’s claim on the cash is an unsecured contract claim, and other reserve assets are claimed as property. If the bank fails as issuer, a holder can tell the trustee to sell the pool and redeem coins in proportion, then claim any shortfall from HSBC. That shortfall is unsecured debt.

No interest and no deposit cover

RedCoin is not a bank account. The wallet is not one either, and it is not part of an integrated account. The coin pays no interest and no yield. Hong Kong’s Deposit Protection Scheme does not cover the coins or a payment that has not settled.

Two wallets that stay apart

Coins cannot move between PayMe and the HSBC HK App. The app wallet is not open. When it opens, the terms allow the coin there only for subscribing to tokenised investments the bank announces.

HSBC holds the coins as custodian in one shared wallet. Your balance is an entry on that channel’s ledger, not coins sitting in the app. You still own them. HSBC keeps the key and will not lend or pledge the coins except on your instruction, or if the law requires it. The announcement puts safekeeping with HSBC Digital Assets Custody.

The coin runs on HSBC’s own network. The terms describe an ERC-20 token on Hyperledger Besu, a permissioned chain that only approved nodes can join, with smart contracts that create and move the coins. Buying, sending and redeeming stay on channels the bank allows.

Use the apps outside Hong Kong and HSBC may lack authority to offer the wallet or the coin, if the law where you are, or where you live, forbids it.

The product page tells customers to watch for fake coins that claim an HSBC link. HSBC says it has none. RedCoin is offered only on PayMe and, later, the HSBC HK App. HSBC says it is not offered through any other third-party channel or platform.

What HSBC says comes later

Later this year HSBC plans a coin wallet in the HSBC HK Mobile Banking App. Customers will be able to subscribe to tokenised investments paid with RedCoin, including a share class that has not launched, in the Hong Kong dollar money market fund the bank has run for years.

John O’Neill, Managing Director, Digital Assets and Currencies, HSBC, says more products will follow soon, including wholesale uses for companies and institutions.

Since 2022 HSBC has joined the HKMA’s e-HKD+ pilot and Project Ensemble, and in Hong Kong it already offers institutional digital bonds on HSBC Orion, the HSBC Gold Token for retail customers, and a tokenised deposit for wholesale payments.

PTYcoin covered Canada’s proposed stablecoin rules.

For someone on PayMe in Hong Kong, RedCoin behaves like another balance in the app. You can send it to friends and family, or spend it where a shop takes PayMe. It cashes back at one Hong Kong dollar a coin, pays nothing, and sits outside the city’s deposit insurance.

This article is not investment advice.